The United States has warned that overseas scam compounds — concentrated in Burma, Cambodia and Laos — have evolved into an industrial-scale criminal economy, costing Americans an estimated $12.5 billion in reported losses in 2025 alone while fuelling human trafficking, money laundering and transnational crime. Officials delivered the assessment before the Senate Foreign Relations Committee on 8 August, calling the situation unprecedented in scale and reach.

Scale of the Criminal Economy

Assistant Secretary of State Michael DeSombre told the committee that what began as isolated fraud rings had metastasised into a sprawling illicit economy with its own infrastructure, workforce and supply chains. 'In Burma, Cambodia and Laos criminal scam operations have reached an unprecedented, industrialised scale,' DeSombre said.

Credible estimates indicate that hundreds of thousands of people from dozens of countries have been trafficked into these operations. American losses in 2025 were three times their 2023 level, with people in all 50 US states targeted. The actual total is expected to be significantly higher than the initial $12.5 billion figure, as many victims do not report losses. Beyond the US, these groups reportedly inflicted losses of up to $114 billion on East Asian and Pacific countries in the same period.

Who Is Behind the Operations

Officials identified Chinese-origin criminal organisations as the principal force driving scam compounds across the three countries. Senate Foreign Relations Committee Chairman Jim Risch said entire cities were now devoted to defrauding Americans, with the networks also enabling illicit drug and arms trafficking.

The organisations operate through layered structures — criminal leaders, managers and scam workers — supported by complicit officials, lawyers, accountants, bankers and cryptocurrency converters. Workers are frequently recruited through false employment advertisements; upon arrival, their passports are seized, and some are reportedly tortured and coerced into conducting online fraud.

Networks Spreading Beyond Southeast Asia

Deputy Assistant Secretary of State David Bedard warned that these networks are spreading into South Asia, Africa, the Western Hemisphere and other regions. They are also shifting from large compounds into hotels and residential buildings to evade detection. 'These networks exploit a persistent vulnerability; criminal operations are borderless, but law enforcement is not,' Bedard said.

Bedard noted the emergence of diverse fraud typologies globally, citing Indian call centre scams, Jamaican lottery scams and cartel timeshare scams, and flagged US concerns about scam centres appearing in Sri Lanka.

Washington's Response

President Donald Trump signed an executive order in March directing federal departments and the attorney general to develop a government-wide plan to identify, disrupt and dismantle the networks. Since then, the US has introduced visa restrictions targeting individuals involved in cybercrime and formed a 13-country Counter Scams Contact Group to coordinate law enforcement action, asset seizures, sanctions, diplomatic pressure and information sharing.

DeSombre confirmed that Trump had raised the issue of transnational criminal organisations directly with Chinese President Xi Jinping, with Washington pressing Beijing to demonstrate it is not enabling these crimes by allowing Chinese crime bosses to face international accountability. How Beijing responds to that pressure will be a key variable in whether the crackdown gains traction.